Textainer Group Holdings Limited (NYSE:TGH) Q4 2019 Earnings Conference Call - Final Transcript

Feb 11, 2020 • 05:00 pm ET

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Textainer Group Holdings Limited (NYSE:TGH) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Thank you and welcome to Textainer's Fourth Quarter and Full-Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be provided at that time. [Operator Instructions]

I will now turn the call over to Ed Yuen, Investor Relations for Textainer Group Holdings Limited.

Executive
Ed Yuen

Thank you. Certain statements made during this conference call may contain forward-looking statements in accordance with US securities laws. These statements involve risks and uncertainties, are only predictions and may differ materially from actual future events or results. The Company's views, estimates, plans and outlook as described within this call may change after this discussion. The Company is under no obligation to modify or update any or all statements that are made. Please see the Company's annual report on Form 20-F for the year ended December 31, 2018, filed with the Securities and Exchange Commission on March 25, 2019, and going forward, any subsequent quarterly filings on Form 6-K for additional information concerning factors that may cause actual results to differ materially from those in the forward-looking statements.

During this call, we will discuss non-GAAP financial measures. As such, measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures will be provided either on this conference call or can be found in today's earnings press release. Finally, along with our earnings release today, we've also provided slides to accompany our comments on today's call. Both the earnings release and the earnings call presentation can be found on Textainer's Investor Relations website at investor.textainer.com.

I would now like to turn the call over to Olivier Ghesquiere, Textainer's President and Chief Executive Officer, for his opening comments.Thank you, Ed. Good afternoon, everyone, and thank you for joining us today for Textainer's Fourth Quarter 2019 Earnings Call. I'll begin by reviewing the highlights of our fourth quarter and full year results, and then I will provide some perspective on the industry. Michael will then go over our financial results in greater detail, after which we will open the call for your questions.

Textainer achieved solid results last year despite a challenging environment that has persisted into 2020. We delivered stable lease rental income of $620 million and leased out 400,000 TEU during the year, most of which was new production leased out at attractive yields with double-digit returns. We made new container investments totaling $739 million during the year and also purchased a container investment company known as LAPCO, transferring about 165,000 TEU from our managed fleet to our own fleet.

Adjusted EBITDA increased 4.8% to $464 million, while adjusted net income increased 7.6% to $55 million or $0.96 per diluted common share as compared to $51 million or $0.90 per diluted common share in the prior year. Average utilization for the year remained high at 97.4%. And at year-end, we owned approximately 85.4% of our fleet, which stood at 3.5